HomeMy WebLinkAbout01-23-2017 Minutes CITY OF OCOEE
MUNICIPAL GENERAL EMPLOYEES' RETIREMENT TRUST FUND
BOARD OF TRUSTEES
QUARTERLY MEETING MINUTES
City Hall, Commission Chambers
Monday, January 23, 2017, at 10:00AM
TRUSTEES PRESENT: Jean Grafton
Patricia Gleason
Robert Godek
Robert Briggs
Gequita Cowan
TRUSTEES ABSENT: None
OTHERS PRESENT: Ferrell Jenne, Foster& Foster
John Thinnes,AndCo Consulting (formerly The Bogdahn Group)
Lee Dehner, Christiansen &Dehner
Russ Wagner, Plan Retiree
Doug Lozen, Foster&Foster
Mark Rhein, Salem Trust
Lynn Skinner, Salem Trust
Debbie Bertling, Human Resource Department, City of Ocoee
Stefanie Wilson, Human Resource Department, City of Ocoee
Amed Avila, Fiduciary Trust
David Lederer, Fiduciary Trust
1. Call to Order Robert Godek called the meeting to order at 10:05AM.
2. Roll Call As reflected above.
3. Public Comments None.
4. Approval of Minutes
The minutes from the November 2, 2016, quarterly meeting were approved upon motion by
Robert Briggs and second by Jean Grafton, motion carded 5-0.
5. Consent Agenda
a. Warrants#26 and#27 for ratification.
b. Warrant#28 for payment approval.
Ferrell Jenne reviewed the invoices for payment and approval. Robert Godek asked about the
CPPT Re-Certification fees and Ferrell Jenne reviewed the annual fee from FPPTA.
The consent agenda was approved as presented upon motion by Jean Grafton and second
by Gequita Cowan,motion carried 5-0.
6. New Business
a. Custodial service interviews.
i. Robert Godek commented that Lee Dehner had been held up in traffic
and the board would wait until he arrived to conduct the interviews.
b. Quarterly fund activity report.
i. Ferrell Jenne reviewed the report and informed the board the monthly
Fifth Third retiree list was not included in the packet based on the
recommendation from the auditor.
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The board approved the quarterly fund activity report as presented, upon motion by
Robert Briggs and second by Jean Grafton, motion carried 5-0.
7. Old Business
a. Further discussion of Records Management Liaison Officer(RMLO).
I. The board decided to table the discussion until Lee Dehner arrived.
8. Reports
a. Foster&Foster, Doug Lozen, Actuary.
i. Presentation of the October 1, 2016, Valuation Report.
1. Doug Lozen reminded the board that the October 1, 2016,
valuation was applicable to the City's plan fiscal-year-end
September 30,2018.
2. Doug Lozen commented that experience had been more
favorable than expected primarily due to average increases in
pensionable compensation that were less than the assumed rate
by almost 2%, and a 7.87% investment return which exceeded
the 775% assumption. These gains were partially offset by lower
than expected retiree mortality.
3. Doug Lozen stated that in spite of a net actuarial gain for the
year, plan funding requirements had increased since the
previous valuation due to a mandated change in mortality rates.
Additionally, there was a City prepaid contribution of$13,019.56
reconciled through fiscal year end September 30, 2016; that will
be available to the City for the fiscal year ending September 30,
2017.
4. City contributions as a percentage of annual payroll increased
from 10.00% in fiscal 2017, to 10.76% in fiscal 2018.
5. Doug Lozen reviewed the assets of the fund and commented the
funding due from the City was determined by comparing the
current liabilities and assets.
6. Doug Lozen reminded the board that the plan had to utilize the
FRS mortality tables in this valuation report which increased the
funding requirements.
7. Doug Lozen stated the funding ratio as of October 1, 2016, was
94% and commented that he wouldn't be surprised to see the
City's funding requirement drop over the next five years.
The board approved the October 1, 2016, Valuation report as presented upon motion by
Robert Briggs and second by Jean Grafton, motion carried 5-0.
8. Ferrell Jenne reminded the board to declare the expected rate of
return since the valuation report had been approved.
The board declared the returns for the plan shall be 7.75% for the next year, the next
several years, and the Iona-term thereafter net of Investment related expenses, upon
motion by Jean Grafton and second by Gequlta Cowan,motion carried 5-0.
b. AndCo Consulting(formerly The eogdahn croup)John Thinnes, Investment
Consultant.
i. John Thinnes informed the board that Tim Nash was unable to attend
due to a death in the family.
ii. John Thinnes reviewed his firm's new name and logo with the board.
iii. Quarterly update as of December 31, 2016.
1. John Thinnes briefly reviewed the market environment during the
quarter.
Note:Lee Dehner arrived at 10:35am.
2. Market value as of December 31, 2016, was$33,668,016.
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3. John Thinnes stated no rebalancing was needed since all
allocations were in line with the Investment Policy Statement.
4. Net returns for the quarter were 0.28%, underperforming the
policy benchmark of 0.76% and placing the fund in the 66'"
percentile on a gross basis. Trailing returns for the 1, 3, and 5
year periods were 6.09%, 4.68%, and 8.21% on a net basis.
Since inception (4/1/2004), net returns were 6.12%,
underperforming the policy benchmark of 6.46%.
5. John Thinnes informed the board that the report was preliminary
since American Realty's returns were not yet in. John
commented the real estate return would be approximately 2-3%.
6. John Thinnes did not recommend making any changes at this
time.
7. Lee Dehner reminded the board about Senate Bill 534
compliance requirements and asked John to send the 60T report
to Ferrell Jenne.
8. Robert Briggs asked about asset allocation for Global Fixed
Income. John Thinnes stated the allocation was at 4.8% with a
target of 5%.
9. Russ Wagner commented that he recalled Brown Advisory had
underperformed for the last few quarters. Russ stated the board
had always been conservative with their manager choices and
expressed his concern with the volatility that could result from
the new presidential administration.
10. Russ Wagner expressed his gratitude to the board for their work.
11. John Thinnes recommended the board sit in on the FPPTA
session regarding active versus passive management.
12. John Thinnes stated he felt it was acceptable to wait until the
next quarterly meeting to discuss any changes regarding Brown
Advisory.
c. Christiansen &Dehner, Lee Dehner, Attorney.
i. Legal update.
1. Lee informed the board that to date, there were no pre-filed
legislative bills that would affect the plan.
2. Lee Dehner stated there was a language change regarding
trustees abstaining from voting when special Interests were
involved.
Note.- The board took a 5 minute recess.
9. New Business(cont.)
a. Custodian interviews.
i. Fiduciary Trust.Amed Avila& David Lederer.
1. Arced Avila and David Lederer introduced themselves to the
board.
2. David Lederer reviewed the core values of their firm and
commented they had been in business over 80 years.
3. David Lederer reviewed their master custody services and
commented that assets are never intermingled with firm assets.
4. David Lederer informed the board that they're a subsidiary of
Franklin Resources and a member of Franklin Templeton
Investments.
5. Amed Avila informed the board that he would be the relationship
manager. Amed stated his firm's relationship officers had an
average tenure of over 18 years, and the average custody
relationship tenure was over 20 years.
6. Amed Avila reviewed the accounting and reporting system his
firm used, commenting they had flexible reporting to meet
specific needs.
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7. Amed Avila reviewed the transition process explaining they had
a conversion team to design a transition plan. Amed stated that
the transition process typically took thirty days and reviewed the
timeline of the transition process.
8. David Lederer commented that the monthly reports were
typically available four days after the end of the month.
9. Robert Godek asked if they lost any clients in the last year.
Amed Avila stated they hadn't lost any accounts in the last year
and had acquired 14 new accounts.
10. Robert Briggs asked about how the City contributions were
deposited. Amed Avila commented they could be deposited via
check or ACH.
11. Jean Grafton commented that the current custodian's platform
created a roadblock to provide information needed for GASB 72.
David and Amed stated there would be no additional fees to
provide this information to the plan auditor.
12. Robert Briggs asked about a conflict since the plan had an
allocation in Templeton. Amed Avila stated the Templeton
holding fee would be waived if hired.
13. Amed Avila confined the contract they currently had in place
with other clients, had been negotiated though Christiansen &
Dehner, and would be acceptable for the Ocoee General Plan.
14. Gequita Cowan asked if there was any date that would cause a
delay in retiree's checks. Amed Avila commented that if the cut-
off date was missed, a manual payment would be processed.
Amed stated they have a target date on the first of the month so
they have time for assets and payments to transfer over.
15. Robert Briggs asked Ferrell Jenne how many benefit payments
were currently being paid. Ferrell commented there were 80
service retirees, 2 DROP retirees, 9 beneficiaries, and 68
terminated vested members as of October 1,2016.
16. Jean Grafton commented that she liked the Fiduciary Trust
presentation and their emphasis on correcting problems the plan
was experiencing.
17. The board asked John Thinnes about his experience with
Fiduciary Trust. John commented he was impressed with Amed
Avila and worked with him on other plans.
ii. Salem Trust, Mark Rhein&Lynn Skinner.
1. Mark Rhein reviewed the history of Salem Trust stating his firm
was the fifth largest company in Florida with more than $7B in
assets,and servicing more than 7,000 retirees.
2. Mark Rhein informed the board that his firm provided payments
via ACH or debit cards.
3. Lynn.Skinner gave examples of how Salem Trust had specifically
helped clients outside of the typical services they provide.
4. Mark Rhein reviewed the service team, stating there was no call
center to go through in order to reach a relationship manager.
5. Mark Rhein reviewed the Salem Trust service report summary.
6. Mark Rhein reviewed the two options for compensation.
a. All-inclusive annual fee of 7 bps payable quarterly, and
assessed on current market value of assets.
b. An annual base fee of 4 bps, payable quarterly,
assessed on current market value of assets, plus a
charge of $2.00 per recurring pension payment and
$4.00 per security purchase or sale.
7. Mark Rhein reviewed the company's service pledge,
commenting that if they fail to fulfill their promise in any quarter,
Salem Trust will discount that quarter's fee.
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8. Robert Godek asked why Pompano left Salem Trust. Mark Rhein
stated it was due to a new conversion their firm went through
and not for service reasons.
9. Robert Briggs asked what the process was for the City's
contributions. Lynn Skinner stated they receive the funds via
ACH or check to a mailbox that is monitored by several people.
10. Robert Briggs asked when monthly statements would be
available. Mark Rhein commented the statements would be
available within five business days after month end unless there
were assets whose information was not readily available, such
as real estate assets.
11. Lynn Skinner asked what caused the board to look at new
custodians. Robert Briggs commented that their current
custodian outsourced their client management and it had caused
the plan to feel as though they had lost control over the
processes.
12. Lynn Skinner reviewed the benefit payment process.
13. Robert Godek asked about the timeline of the transition. Lynn
Skinner stated that it would take approximately 45 days, but
Mark Rhein commented it would depend on how/when they
receive the information from the prior custodian.
14. Jean Grafton asked how many Florida accounts Salem Trust
had. Mark Rhein stated approximately 180 clients.
15. John Thinnes commented that if the board chose Salem Trust,
Option#2 would be the better compensation option based on the
number of benefit payments and security purchases or sales.
16. Robert Godek asked Lee Dehner if he knew why the Police and
Fire Board went with Fiduciary Trust. Lee commented that they
were a separate board and the General Board shouldn't base
their decision on the Police& Fire Board decision.
17. Robert Briggs asked Ferrell Jenne if any retirees were currently
receiving a paper check since this was not an option with Salem
Trust. Ferrell commented that she would have to research this.
18. John Thinnes commented that he liked both custodians and it
should come down to who the Board was most comfortable with.
19. John Thinnes stated that a realistic timeline of a conversion
would be 45 days to 2 months.
20. Robert Briggs commented that he liked Salem Trust due to the
location and the client relationship.
The board voted to hire Salem Trust for custodial services, using compensation
Option #2, contingent upon contract approval from Christiansen & Dehner, upon
motion by Robert Briggs and second by Jean Grafton, motion carried 5-0.
21. John Thinnes commented he would send a notification letter to
Fifth Third thanking them for their service.
10. Old Business (cont.)
a. Further discussion of Records Management Liaison Officer(RMLO)and adoption
of retention schedule GS-1SL.
i. Lee Dehner stated that anyone could be designated as the RMLO.
ii. Robert Briggs commented he would like Ferrell Jenne to scan in all the
retiree files so they are secure and are in electronic form.
The board appointed Ferrell Jenne as the Records Management Liaison Officer (RMLO)
and adopted the GS-1SL Records Retention Schedule, upon motion by Jean Grafton and
second by Gequita Cowan, motion carried 5-0.
11. Staff Reports, Discussion,and Action
a Educational opportunities.
i. Ferrell Jenne informed the board of upcoming FPPTA conferences.
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